President Muhammadu Buhari may have left the immediate past chairman of the Federal Inland Revenue Service, Tunde Fowler, shocked with the replacement Monday of the revenue chief.
Mr Fowler on Monday wrote to the Secretary to the Government of the Federation, Boss Mustapha, asking to be allowed to continue his work at the helm of the FIRS to “consolidate and build on the achievements” which he highlighted in an attachment to his letter.
Mr Fowler’s letter, obtained by PREMIUM TIMES, was dated December 9, the expiration date of his tenure. Rather than grant Mr Fowler’s request, however, President Buhari hours later announced the appointment of Muhammad Nami as the new chief executive of the FIRS, thereby discharging Mr Fowler.
Mr Nami’s appointment is subject to the approval of the Senate.
A graduate of Bayero University, Kano, Mr Nami was appointed as a member, Presidential Committee on Audit of Recovered Stolen Assets in November 2017 by Mr Buhari.
After his removal, on Monday, Mr Fowler accepted his fate and thanked the president. “There is nothing automatic about having a second term,” the former tax chief told his former colleagues, according to a statement by Wahab Gbadamosi, the FIRS spokesperson.
The thought of a non-automatic second term did not, however, deter Mr Fowler from requesting one.
In his letter seeking the renewal of his appointment, Mr Fowler highlighted that his tenure was coming to an end but he wanted an extension.
“I write to notify the Secretary to the Government of the Federation that my first tenure as the Executive Chairman of the Federal Inland Service (FIRS) ends today 9th December 2019,” wrote Mr Fowler in his letter to Mr Mustapha.
“In view of the above, I wish to present myself for reappointment for a second term. This is consistent with the provisions of the FIRS Establishment Act 2007 and would grant me the opportunity to consolidate and build on the achievements we have recorded in the past four years,” he wrote.
It is not clear why Mr Fowler waited till his last day in office to write the letter. The spokesperson for the FIRS simply said “that was his remit” when asked why Mr Fowler waited till his last day in office to write the request.
However, months before Mr Fowler’s request for reappointment, his fate appeared to have been sealed following an exchange of letters he had with the powerful Chief of Staff to President Buhari, Abba Kyari.
In August, the presidency, in a a letter signed by Mr Kyari, had queried Mr Fowler over worsening tax collection since 2015.
“We have observed significant variances between the budgeted collections and actual collections for the period 2015 to 2018,” read Mr Kyari’s letter stamp-dated August 8, 2019.
Checks by PREMIUM TIMES showed that since 2015, the FIRS under Mr Fowler has not been able to meet collection targets, a different trend from the preceding years.
In 2015, FIRS set N4.7 trillion target but was only able to make N3.7 trillion in the actual collection.
In 2016, 2017 and 2018, the target collections were N4.2 trillion, N4.8 trillion and N6.7 trillion but the actual collections were N3.3 trillion, N4.0 trillion and N5.3 trillion, respectively.
Worried by the variances, the presidency asked Mr Fowler for an explanation.
“Accordingly, you are kindly invited to submit a comprehensive variance analysis explaining the reasons for the variances between the budgeted collections and actual collections for each main tax item for each of the years 2015 to 2018,” Mr Kyari wrote.
Analysis of Nigeria’s tax statistics showed that before Mr Buhari and Mr Fowler came in 2015, the only year FIRS could not meet its collection target was 2006 since the year 2000.
But in the query served Mr Fowler, the presidency only mentioned 2012 to 2014.
“Further we have observed that actual collections for the period between 2015 and 2017 were significantly worse than what was collected between 2012 and 2014,” stated Mr Kyari. “Accordingly, you are kindly invited to explain the reasons for the poor collections.”
The query to Mr Fowler came weeks after an anti-corruption agency, EFCC, detained top officials of the FIRS for several days as part of a corruption investigation.
That investigation is still ongoing by the EFCC.
All facts not considered
In his reply, Mr Fowler, suggested that the query served him did not reflect all the facts.
While he agreed that actual tax collection since the beginning of Mr Buhari’s administration is lower than the 2012-2014 period under former President Goodluck Jonathan, in general terms, he told the presidency FIRS under him has performed better regarding specific non-oil tax types, such as VAT and CIT.
He associated the general lower collection since 2015 to oil market crisis which has seen a fall in commodity price compared to the period under Mr Jonathan, and recession “which slowed down economic activities.”
He said FIRS has control of non-oil revenue collection, which “grew by N1,304.20 trillion or 21% between the period 2016 to 2018,” unlike oil revenue collection which is “subject to more external forces.”
He further explained that oil price fall and low production caused the variances between the country’s target collections and actual collections since the beginning of the present administration.
“Notwithstanding government efforts to diversify the economy; oil revenues remain an important component of all revenues accruable to the Federation,” Mr Fowler said. “The crude oil price fell from an average of $113.72, $110.98 and 100.40 per barrel in 2012, 2013 and 2014 to $52.65, $43.80 and $54.08 in 2015, 2016 and 2017.
“There was also a reduction in crude oil production from 2.31 mbpd, 2.18 mbpd and 2.20 mbpd in 2012, 2013 and 2014 to 2.12 mbpd, 1.81 mbpd, and 1.88 mbpd in 2015, 2016 and 2017, respectively.”
He added that “a troubled economy is associated with his tax collection performance”.
“The Nigerian economy also went into recession in the second quarter of 2016 which slowed down the general economic activities,” he said. “Tax revenue collection (CIT and VAT) being a function of economic activities were negatively affected but actual collections of the above two taxes were still higher in 2016 to 2018 than in 2012 to 2014,” he said.
“During the years 2012, 2013 and 2014, GDP grew by 4.3%, 4.4% and 6.3%, while in 2015, 2016 and 2017, GDP grew by 2.7%, -1.6% and 1.9%, respectively. The tax revenue grew as the economy recovered in the second quarters of 2017.”
PREMIUM TIMES checks shows that between 2012 and 2014, CIT revenue was N2.9 trillion and N3.5 trillion between 2016 and 2018. Also, VAT between 2016 and 2018 was N2.9 trillion, higher than N2.3 that was gained between 2012 and 2014.
Mr Fowler said the “strategies and initiatives” adopted for the collection of VAT under him was responsible for the increase over the 2012 to 2014 period.
“In 2012, the VAT collected was N802 billion compared to N1.1 trillion in 2018,” he said. “This increase is attributable to various initiatives such as ICT innovations, continuous taxpayer education, taxpayer enlightenment, etc embarked upon by the Service.”